The post Deaton Calls Out BlackRock’s Bitcoin Buy: Profit Play or Power Move? appeared first on Coinpedia Fintech News

• Author Jason Williams’ tweet claimed that BlackRock is buying bitcoin and preparing to launch a bitcoin ETF, sparking speculation.

Cryptocurrency industry insiders are questioning the motivations behind financial giant BlackRock’s reported bitcoin purchases and plans for a bitcoin exchange-traded fund (ETF).

The speculation stems from a tweet by author Jason Williams claiming that BlackRock is actively buying Bitcoin while also preparing to launch a Bitcoin ETF. Crypto lawyer John Deaton replied, theorizing that BlackRock insiders could personally profit from Bitcoin’s price fluctuations around an ETF approval.

If true, there’s a simple business model at play. Insiders at BlackRock buy now. ETF is approved within the next 5 months. BlackRock’s ETF sales force comes out aggressive and pushes customers to buy, while, at the same time, warning that #BTC could drop 30-50% thus, it’s a… https://t.co/HomvT4HsyC

— John E Deaton (@JohnEDeaton1) October 24, 2023

According to Deaton, the alleged strategy would involve BlackRock insiders buying bitcoin now, then encouraging customers to buy the firm’s bitcoin ETF upon approval in the coming months. This ETF marketing could potentially propel Bitcoin’s price higher.

BlackRock insiders could likely rake in huge profits

Then, if bitcoin drops 30–50% at any point, as often occurs in crypto markets, the insiders could sell and generate huge profits, Deaton speculated. After the crash, they could rebuy Bitcoin at lower prices and repeat the cycle.

No direct evidence exists to substantiate this theory. However, the tweets highlight the ongoing debate around potential conflicts of interest as large financial institutions like BlackRock enter the cryptocurrency space.

Critics argue that insider access could allow firms like BlackRock to benefit disproportionately from Bitcoin’s volatility around major SEC decisions. Meanwhile, average retail traders face information disadvantages.

Whether or not the alleged tactics come to fruition, the situation illustrates the new regulatory challenges arising with traditional finance’s expanding presence in crypto. While the SEC has yet to approve a bitcoin ETF, BlackRock’s reported bitcoin allocation suggests growing institutional demand.